Utility rates are going up...how will you manage?
By: Reliable Choice Energy
The cost of pretty much everything is going up these days and utility rates are no exception. For example, the market price of natural gas is up by over 60 percent compared to this time last year. While some utilities may have prebought portions to cover near term needs, all will eventually be forced to pass through these higher prices. As regulated entities, they are in fact guaranteed the right to do just that, even if it means coming back later to collect their dues. Case in point, each of Michigan’s four largest natural gas utilities have already filed notices with the Michigan Public Service Commission to increase gas supply rates, effective April 1. The good news is there are steps you can take to manage and ultimately minimize your exposure to these increases.
The first and most obvious step is to keep your natural gas use as low as possible. That is prudent regardless and we always encourage our clients to be conscientious consumers of energy. But you cannot stop there as it is only half of the equation. The other half is the rate you pay per unit, and it must also be evaluated regularly as part of your overall utility management plan.
Utility bills are complex, but your natural gas costs can be subdivided into two basic rate components: (1) the supply rate you pay for the gas itself and (2) the delivery rate you pay for the use of the utility lines and equipment. To ensure you are paying the lowest rate overall, it is important to evaluate each of these components.
Starting with delivery rates, most utilities offer a variety of service rate options. Your best rate is typically determined by your annual level of use and/or pattern of use. These rates change frequently and while your utility can assist in explaining the availability and application of each, it is clearly stated in each utility’s tariff that selection of the proper rate is your responsibility, not theirs. Customers of DTE gas should be aware that they implemented a significant delivery rate increase effective January 1.
That brings us to supply rates, this is where things get interesting and unfortunately, at times frustrating. Interesting as it represents your best way to avoid unexpected surprises. Frustrating as therefore you might be getting hit up by an army of telemarketers that just won’t quit. It is important to not let the latter keep you from considering what is likely your best way to control costs.
The first and most obvious step is to keep your natural gas use as low as possible. That is prudent regardless and we always encourage our clients to be conscientious consumers of energy. But you cannot stop there as it is only half of the equation. The other half is the rate you pay per unit, and it must also be evaluated regularly as part of your overall utility management plan.
Utility bills are complex, but your natural gas costs can be subdivided into two basic rate components: (1) the supply rate you pay for the gas itself and (2) the delivery rate you pay for the use of the utility lines and equipment. To ensure you are paying the lowest rate overall, it is important to evaluate each of these components.
Starting with delivery rates, most utilities offer a variety of service rate options. Your best rate is typically determined by your annual level of use and/or pattern of use. These rates change frequently and while your utility can assist in explaining the availability and application of each, it is clearly stated in each utility’s tariff that selection of the proper rate is your responsibility, not theirs. Customers of DTE gas should be aware that they implemented a significant delivery rate increase effective January 1.
That brings us to supply rates, this is where things get interesting and unfortunately, at times frustrating. Interesting as it represents your best way to avoid unexpected surprises. Frustrating as therefore you might be getting hit up by an army of telemarketers that just won’t quit. It is important to not let the latter keep you from considering what is likely your best way to control costs.
To keep things simple, supply rates can be broken down into 2 categories: (1) variable rates which are subject to change each month; and (2) fixed rates which stay flat over a set period, generally about one to three years. Default supply rates charged by your utility fall into the variable category. For the past 5+ years, variable supply rates have been quite low. As a result, those who chose a variable option or in many cases, those just not paying attention, have been happy campers. Things are changing in the market and many are now considering the option of fixing a rate to eliminate any further upward price risk. Regardless of what you decide, this is something to be considered.
The bottom line is, although some increase in your utility expenses is unavoidable, you can take steps to manage and minimize the impact. As an Endorsed Partner of the MRLA, Reliable Energy is here to help. Our initial evaluation of your current utility rates and options is provided at no cost and with no obligation so please take advantage!
For more information please contact Pamela Sawatzki at [email protected].
The bottom line is, although some increase in your utility expenses is unavoidable, you can take steps to manage and minimize the impact. As an Endorsed Partner of the MRLA, Reliable Energy is here to help. Our initial evaluation of your current utility rates and options is provided at no cost and with no obligation so please take advantage!
For more information please contact Pamela Sawatzki at [email protected].
